You are not alone: social capital and risk exposure in rural Ethiopia

Tesfamicheal Wossen, Salvatore Falco, Thomas Berger and William McClain
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Salvatore Falco: University of Geneva
Thomas Berger: University of Hohenheim
William McClain: Purdue University

Food Security: The Science, Sociology and Economics of Food Production and Access to Food, 2016, vol. 8, issue 4, No 9, 799-813

Abstract: Abstract This paper examines the impact of shocks on food security and the insurance role of social capital and informal social networks. In particular, by combining household panel data, weather data, self-reported shocks and detailed social capital information, the paper investigates the insurance role of social capital against covariate and idiosyncratic shocks. Our results suggest that both covariate and idiosyncratic shocks increase the prevalence of food insecurity. However, households with a higher stock of social capital were able to smooth consumption. We also found that food consumption is not insured through social capital when a shock affects the whole risk-sharing network. Moreover, we show that formal policy interventions such as access to consumption credit and safety nets are the only effective ways of insuring food consumption when a shock affects the entire risk-sharing network.

Keywords: Consumption; Social capital; Insurance; Shocks; Ethiopia (search for similar items in EconPapers)
JEL-codes: C23 D12 D71 O12 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s12571-016-0587-5

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